Hassan signs new state budget into law; new fiscal year will begin Monday

As expected, the state’s new fiscal year will dawn Monday with a new budget in place.

Gov. Maggie Hassan yesterday signed into law the two-year, $10.75 billion budget that the Legislature passed Wednesday. It cleared the Republican-led Senate on a unanimous vote and passed the Democratic-led House with nearly unanimous support.

“With our budget now in place, we have been able to make true and meaningful progress on the priorities that matter to the people of New Hampshire,” said Hassan, a Democrat, in a statement. “We must continue working together in the spirit of bipartisanship to keep our state moving forward toward a stronger, more innovative economic future.”

The compromise budget was hammered out this month by House and Senate negotiators after each chamber had passed its own version. In all, it spends about $10.75 billion over the next two years including $2.7 billion from the general fund.

The last state budget, passed in 2011, spent $10.2 billion over two years. Produced by a then-Republican-controlled Legislature, it became law without the signature of then-Gov. John Lynch, a Democrat.

The new budget contains no major tax or fee increases and increases funding for higher education, mental health services and other state programs. It delays a decision on whether to expand the Medicaid program until after a study commission issues its final report by Oct. 15.

The budget contains money to give raises to state workers, though it also includes across-the-board cuts to personnel costs and several state agencies, including a $7 million cut to the Department of Health and Human Services.

Hassan and the House had proposed increasing the tobacco tax and several fees, but those were rejected by the Senate. Still, an automatic increase in the tobacco tax is expected to take effect in August, raising the tax from $1.68 per pack to $1.78 per pack.

The budget also allows a trio of changes to business-tax laws that had been passed by the last Legislature to take effect as planned; Hassan and the House had initially proposed delaying them.

Sen. Chuck Morse, a Salem Republican and chairman of the Senate Finance Committee, said it’s now up to the Hassan administration to manage state spending, including the back-of-the-budget cuts to personnel, HHS and other agencies.

“Now that the budget is law, the work of managing state government within the framework of this document must begin. From day one, the governor and executive branch officials must be conscious and careful stewards of taxpayer dollars to ensure proper spending targets are met,” Morse said in a statement. “The Legislature looks forward to working with the governor in our oversight capacity to ensure this budget remains balanced.”

(Ben Leubsdorf can be reached at 369-3307 or bleubsdorf@cmonitor.com or on Twitter @BenLeubsdorf.)